Harvard Business School alumni are more preoccupied with income inequality, rampant poverty and the languishing state of the middle class, than with the speed of economic growth, according to a new study.
The annual survey conducted on Harvard’s business graduates showed that the members of this financial elite have noticed an improvement in the American economic and business environment since the recession.
However, they expect that the results of this growth will not be distributed equally. They predict that the healing economy will only be beneficial to the top 1% of income earners, while the rest of the population will continue to struggle.
2,716 respondents were included in the ”Challenge of Shared Prosperity” study, and opinions were mixed when asked how U.S. competitiveness is faring in comparison with other nations, or how the business environment is progressing when measured against other countries. 53% estimated that the American economy would be at least as lucrative as that of its foreign counterparts.
In contrast, a similar survey conducted in 2011 showed that the majority of survey participants believed the U.S. lagged behind its rivals, while just 29% deemed it as competitive. According to experts, this growing optimism may be correlated with ”a generalized sentiment that the U.S. has become a better place to do business”.
On the other hand, respondents are in unison when it comes to believing that such positive changes will only impact wealthy people like themselves. Only a third of them believe companies will give wage raises to workers, no matter how well the economy fares.
Harvard alumni predict that 40% of the future income gains will be distributed to the richest 1%, while only a third of the profits will reach the bottom 80%. If given the chance to intervene, participants claimed they would try to diminish the wealth gap and ensure equal distribution of the funds among all income categories.
”With all these good things going on, we haven’t created an evenly dispersed set of opportunity”, emphasized Karen Mills, senior fellow at Harvard Business School.
Another aspect included in the study was the top economic priority America should have. Two thirds of the subjects believed that the main focus should be growing poverty rates, wealth disparity, lack of economic mobility and the stagnation of the middle class.
Approximately 45% worried that rampart poverty could be detrimental to their business, and a significant number of participants realized that socio-economic ineqality would result in a shortage of skilled workers and a lower demand for products. However, there was widespread confusion among respondents regarding how inequality could be addressed.
These findings come at a time in history when the United States has become ”the most robust economy in the world”, according to Gregory Daco, head of U.S. macroeconomics at Oxford Economics. The unemployment rate has dropped to 5.1%, while job creation has been experiencing a steady growth since 2014.
Despite these positive signs, it is obvious that measures such as tax reforms and minimum wage increases should be taken, to ensure the redistribution of wealth across society.
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